Bank may consider enhancement in the limit of parties having satisfactory performance during the last season. The rice mill units are categorized as small (manufacturing) sector units and as per RBI guidelines these units are eligible for getting working facility on the basis of Nayak Committee recommendations. However, the Rice Mills being seasonal industry, Bank have/had adopted any one of the following methods for sanctioning a rational and required working credit limit to them, which will continue to be applied.

As per Nayak Committee recommendations – MPBF- 20% on the basis of projected sale turnover.

IInd method of lending as per Tandon Committee norms.

Under traditional method of lending adopted in our bank for assessment of working capital requirements of rice mill which is a seasonal industry, the maximum inventory and receivables holdings have been proposed to be continued as per last year’s Rice Mill policy, which are as under:-

(No. of Days holding)

Paddy

Rice

Debtors

60

45

90

The level of creditors shall be taken on an average for last financial year subject to maximum 15 days since during peak period it remains very low and working capital is assessed on the basis of peak period requirements. The level of creditors during current year will also depend upon the availability of paddy i.e. its shortage may reduce the level of creditors to a NIL level also.

Interest rate :

Agg. Marks

Cr. Rate

Existing Rate of Intt.

Rate of Intt. Proposed

95 – 100

RA++

Base rate +0.50%

Base rate +0.50%

91 – 94

RA+

86 – 90

RA

76 – 85

RB++

Base rate+1.00%

Base rate+1.00%

66 – 75

RB+

56 – 65

RB

Base rate +2.00%

Base rate +2.00%

55 & less

RC

Keeping in view that this is a seasonal industry and it carries the effects of government policy for the industries, as such the financial ratios during peak season/ at the year-end may differ from average ratios, thus the prescribed negative scoring applicable to usual commercial and industrial accounts may be exempted.